Zara Strategy Essay

Words: 3419
Pages: 14
Open Document
-------------------------------------------------
Masters in Financial Management
-------------------------------------------------
2011 - 2012

-------------------------------------------------

-------------------------------------------------
Zara: responsive, high speed, affordable fashion
-------------------------------------------------

Strategic Management

Prof Dr Peter Verhezen

Quynh Lan Nguyen

Engaging in irregularities is severely sanctioned in correspondence with article 34 of the Examination rules.

We hereby declare that we have not engaged in any such irregularities.

Student(s)’s signature(s) Table of contents
Introduction 2
Challenges 2
Industry competition 3
Positioning and competitive …show more content…
Supplier’s bargaining power: There is no negotiation power for suppliers as the number of suppliers is large (Garcia, 2010, pp.47, 48)
Figure 2: Zara five forces analysis

Positioning and competitive advantage
As analyzed above, the fashion industry is highly competitive. The threat of new entrants and the bargaining power of customers are medium, and there is no threat of substitute products; however, the market growth rate is small and global competitors are strong. How Zara was successful and thrived in the global fashion industry relied on its distinct strategy.
Vertical integration is a distinct feature of Zara’s business model. Zara works differently from traditional retailers who outsource all of its production. Traditional retailers take advantage of lower cost production in developing countries and try to focus on marketing and distributing goods. In the meanwhile, Zara owns its in-house production to manufacture products that are more fashion-dependent. It does all production, distribution and marketing activities for these fashionable clothes. By owning in-house production, Zara gain a lot of flexibility as it can easily change designs, materials, amounts and frequency of new clothes. This allows Zara to provide its customers with updated products every two weeks. Traditional retailers never achieve this flexibility, as they have to place production orders to oversea manufacturers at least 6 months
Show More

Related Documents: Zara Strategy Essay

Zara It Strategies for Retail Essay

Matteo Fioravanti Abbey Road - MIB 2013 2355 words Zara: IT for Fast Fashion Zara: IT for Fast Fashion EXECUTIVE SUMMARY In This case we see the typical problem which affect big Companies : the conflict between old style and new school of thought. We analyze Zara’s information Technology strategies and the diatribe between Salgado, The Head of the Department and Sanchez , his assistant,s concern upgrading the operating system and the implementation of a new IT system to fulfill the needs…

Words 2577 - Pages 11

Zara Case Essay

Case # 4 – Zara Zara is the flagship company of Inditex, an international clothing retailer. Zara began its business as a small retail store in Spain founded by Amancio Ortega Gaona in 1975. In the following decades Zara has grown to nearly 450 store location in 29 countries by the year 2000. Zara consistently accounts for more than 80% of Inditex’s net sales as indicated by Figure 1; linking the success of Inditex to the success of the strategies of Zara. Figure 1 Inditex Net Sales by Concept…

Words 1566 - Pages 7

Essay on zara international business

Zara is a chain store of Inditex Group owned by Spanish tycoon Amancio Ortega. Zara is claimed to require only two weeks to develop a new product and distributed these products to the various outlets worldwide, where the industry standard is about six-month. Being in the fashion industry, Zara not only aims to offer good quality merchandise, it also tries to provide good customer service by understanding what its customers want. Zara has developed a supply chain that enables the brand to provide…

Words 879 - Pages 4

Zara Essay

Outsourcing Zara Created by: Brenda Dyck 1> As Mr. Salgado, what will you do concerning the issue of upgrading the POS terminal? Will you upgrade to a modern operating system? Should the POS applications be rewritten to include any additional functionality? If so, what functionality? Response: Yes, I would upgrade both the POS terminal and modernize the operating system. With Dos being outdated and no longer being supported by the IT industry Zara has an unnecessary business risk. Zara supports…

Words 1146 - Pages 5

Zara Case Essay

economics, is low cost, high control, and quick turnaround. Zara is just one of six retail stores operated by, Inditex, the parent company. Inditex owns Comditel, a subsidiary, which manages the dyeing, patterning, and finishing of gray fabric and supplied finished fabric to external as well as in-house manufacturers. By owning this company, Zara is able to maintain low cost production while being able to finish fabric in a week. Zara has the ability to obtain its main raw materials as well as…

Words 1457 - Pages 6

Zara's Supply Chain Managment Essay

Zara: IT for Fast Fashion | Individual Case Essay | | BUS 510 Management Information Systems Dr. Y. K. Mortagy | | Mengyang Chen | Fall 2012 | | Table of Contents Abstract 3 Case Summary 4 Business Analysis 5 Generic Strategy 5 Five Forces 7 Value Chain Analysis 9 Implementations of Porter Models 10 Solution Evaluation 11 Cost analysis 12 Benefit Analysis 13 Conclusion and Recommendations 16 References 17 Appendix 18 Exhibit 1 18 Exhibit…

Words 4758 - Pages 20

Essay on Zara 2

Zara is recognised as the one of the world’s largest fashion companies specializing in reagards with women, men and children apparel .It is considered as the top band and was operated under different multinational distribution group. It was founded in 1975 in Galicia Spain.Basically zara sells clothing ,accessories ,shoes and allows customer to do one stop shopping centre with all thier needs .The company’s target market usually applied to the upper middle-class ,trendy ,women ages 16-35 who enjoy…

Words 1184 - Pages 5

Essay on Zara Analysis

1. How is Zara organized with respect to its vertical integration and outsourcing decisions? What governance structure does it appear to follow? Support your conclusions with reference to details of the Zara case and the Ferdows reading. Vertical integration occurs when a company expands its business into areas that are at different points on the same production path, such as when a manufacturer owns its supplier and/or distributor. This definition of vertical integration applies to Zara as they own…

Words 959 - Pages 4

Zara and Reiss Comaparison Essay

After approaching a Reiss and Zara Store in Oxford circus, speaking to staff and doing some more research on the internet i have come to notice both ZARA and REISS are a growing profitable companies. When looking at REISS THE BRAND: Reiss a retailer of “own brand” quality fashion menswear and womenswear that established itself in London in 1970. The brand has become reorganized as a progressive, fashion-led retail company. Designing and producing own –label ranges it offers an aspirational look…

Words 1121 - Pages 5

Zara Case Essay

and is expected to show high resistance in response to it. Even though Zara has a decentralized decision making process, the retailer’s IS department exercises absolute autonomy on the IT infrastructure and design. The fact that “only one person had left the department” in the past 10 years further confirms that the retailer is suffering from cognitive and action inertia, and thus creating a huge barrier for such…

Words 1470 - Pages 6