Zara uses its latest advanced and integrated information system to be able to link, monitor and follow up its entire supply chain with ease. By being able to link the whole process starting from design, production, distribution and finally to retailing. The supply chain system starts from a group of creative professionals (designers) that are responsible for developing all shapes and styles that. closely fit the current market trends and needs After design completion, the raw materials are send to an In-House fabric cut consisting of local Spanish cooperatives for sewing the cloths. After sewing, the cloths are then returned back to the designers and are handed in to assembly line workers for ironing. The cloths are then wrapped and packaged …show more content…
Zara's model particularly, was quick to respond to the shifts in consumer's tastes. Zara's fashion designs stay in the market for not more than four weeks. This makes the visitors to have repeated visits to the store. Many case studies stated that Zara fashion is very cheap. The outcome was surprising there were at least twice as much people with H&M bags, as with Zara ones in the same day and hour. Although, there are small group of posh people with higher incomes which prefer to buy Louis Vuitton, Versace and for them Zara is relatively cheap. Zara is overpriced because the real price of garment do not exceeds more than 2-10 euro and it is normal to be sold for price between 20 – 30 euro. For that reason, the majority of people that were questioned prefer to go to H&M because this firm has clothes with relatively high quality and they are sold for lower prices. Although Zara has many disadvantages but it is still one of the biggest retailer of clothes in world and I respect it for that …show more content…
Merging in this way with something further on in the production process (and thus closer to the final consumer) is known as forward integration. Meaning that two businesses are combined and work together but each of them produce different production., vertical and horizontal integration are different from each
However, Zara are usually compared to premium brands for instance Armani, Hugo Boss and others because of this Zara have some stores which are premium and others which are affordable. Zara mostly have a premium pricing strategy the pricing is made by optimising development and training costs (Hitesh Bhasin, Marketing mix of Zara) looking at pricing as portion strategy Zara are looking into high quality and high price. Zara pricing approach in my opinion is value-based for example a detail in a product and the quality of the product will mean the cost will be higher for instance a well designed detailed leather jacket will cost more compared to a basic design leather jacket because the difference of producing the detailed jacket which takes time to designing and material being used compared to the basic quick to make
(i) Product Extension: In this type of mergers, firms that sell non-competing products and use related marketing channels of production processes merge.
However, instead of the lean approaches mainly making forecasts according to the EPOS data, the agile approach need to do more work. First of all, demand recording and forecasting. For instance the retailers should make records of the everyday demand and make forecasts of the future demand trend with the help of current demand data. By doing this, Promotions can be forehead noticed and the reaction speed can be improved. Secondly, the information system. The information system is the bridge between different upstream and downstream partners. Thus it is very important for the agility partners improve their information system to smooth the information transfer. For instance, electronic data interchange (EDI), radio frequency identification (RFID), and Distribution Requirements Planning (DRP) system are all good information systems for transferring the EPOS
Zara sources fabric, other inputs, and finished products from external suppliers. It has purchasing offices in Barcelona and Hong Kong. This gives Zara a competitive advantage towards the costs of goods sold, as it can purchase from both Europe and Asia according to prices. Buying more from China in the future might reduce even more the costs of goods sold.
Zara’s own brand and business model is equally competent and valuable because it involves fast turnaround times of quality designer clothing from their own manufacturing factories. It 's also pointed out that this enables them to launch new products every week which attracts customers back even though they do not advertise in order to concentrate their revenue on growing and expanding into more countries like
According to a North American dictionary entry vertical integration is defined as “merging of companies in supply chain: the merging of companies that are in the chain of companies handling a single item from raw material production to retail sale” (“Vertical Integration,” 2009). Though the definition of vertical integration is quite simple the concept is much more complicated than one may think. There are four strategic factors that must be established by business leaders before the implementation of vertical integration can take place that must be well-thought-out in order to achieve any level of success. The factors that influence vertical integration are economic, market, operational, and strategic.
Analysis & Recommendation: Zara’s main strategy is the ability to respond very quickly to the demands of target customers which called for identifying trends of the customer in advance. The company has been able to identify the trends and meet the demand with the help of its autonomously organized structure and its effective value chain systems. The present system followed by Zara has been very effective and very easy to maintain, which as a result has persuaded the company to continue without any change in the present system so far. The problem that Zara faces right now is that the system that they use, P-O-S (Point of Sale terminals), runs on DOS which Microsoft does not support anymore and any hardware change in the POS terminal will not be compatible with the current POS software. Although the sense of urgency for the change may not be that high, investing in IT infrastructure is a must as MS Dos is an obsolete technology and there is no contract or guarantee from their POS terminal vendor that they will continue supplying the same terminal with out much changes in the hardware for any specific period of time, therefore change is unavoidable. The other main issue that Zara faces is that the stores don’t share inventory information electronically and hence inventory management becomes highly difficult and manual. The decision making process is based on the judgment of employees throughout the company instead of relying on a small set of decision makers; the majority of the decisions were made by store managers and as a result they placed orders for the items rather than simply accepting and displaying what headquarters decided to send them.
b) Zara can focus on expanding and increasing the number of outlets in Asian countries such as China and India. The scope of development is very high and the demand for fashionable clothes is increasing at a very fast rate. But it will have to focus on other local competitors who provides the latest fashion at a cheaper rate. As Zara is a known brand, so it would be easy to increase awareness among the consumers through advertisement, promotions and celeb endorsements.
The fundamental business strategy of Zara is very simple which is linking customer demand to manufacturing, and liking manufacturing to distribution. Zara has been running their business in fashion industry which is susceptible to seasons and quick changing customer tastes. Zara has been approached to and considered their business as a perishable commodity business just like a fresh baked cake or bread to be consumed quickly.
Segmentation: Some of the important bases for segmenting consumer markets are Demographic, Geographic, benefits, Psychographic and Usage rate segmentation. Geographic segmentation is the priority of Zara. It is a global brand and its supply chain management is very much perfect. It helps Zara in getting the latest trends into stores in three weeks’ time based on consumer preferences. It’s a Spanish brand, so it would a better option for Zara to open more store in European countries. Consumers would be more interested in making their decision towards preferring Zara. It has dived its segment on the basis of gender where more preference is for women and less preference for men. It can be seen that in any Zara store there are two floor for women and 1 floor or a part of a floor for men products. For example, the store in Leeds. It focuses on women age group up to 35 years who is more concerned about having a fashionable life style. As per the psychographic segmentation, Zara consumers are more ambitious and are attracted towards fancy and trendy products. It makes products that give...
The business model that sets Zara apart from other clothing retailers is how rapidly the company changes stocks and releases new product lineups. The company averages 12-16 collections annually which equates to more than one lineup a month. Due to stock being limited and the rapid production Zara brings forth, their items are viewed as exclusive promoting further business. Their customers are happy knowing that their specific article of clothing is more “rare” due to only having an average of a two-week window to purchase the clothing. The company specifically targets current trends and has them in the store within 30 days. This maintains the brand’s uniqueness and relativity in fashion.
Supply chain management has been defined as that process that involves the management of information, materials, and all the finances that are handled within and across the entire supply chain process (Christopher, 2016). The management is usually done through out the entire supply chain management from that moment when the suppliers are involved through all the manufacturing activities, different distribution activities, and the way that the products are served to the final product consumer (Turban, et al., 2002). The process also includes all the activities that different organizations offers to their customers as after sale services for purposes perfecting their services and products towards their highly valued customers (Christopher,
Shopping and shipping: Zappos tried to put effort to make shopping enjoyable. The Zappos website was known as the easy shopping center. Zappos provides direction that how customers improve features, plan inventory and adapt search results. Zappos was adopted simplicity, creativity, great service of inventory and distribution. Zappos provides
It’s lead people follow the way of fashion and make customer look as one another. The brands of high street fashion are homogenized. High street fashion depends on their marketing model to attract consumers. The big sales of almost same garments led costumers lost out the diversity. The marketing strategies of high street fashion companies involve physical stores and online stores. They stick to providing low-cost products and follow fashion trend principles, resulting in the mass production of clothing and global distribution. Online stores and physical stores are selling almost the same garments in different countries. ‘They are virtually identical in similar neighbourhoods in the major cities all over the world. There is less difference across borders; this fashion they produce is global’ (Jawdat, 2014). Due to the low-cost marketing mode, more and more consumers have favoured a high street brand. Therefore, its sales are also growing, resulting in everyone’s style of dress more like. As the world 's biggest fashion retailer, the current situation of ZARA can representative the high street industry. ‘Zara sells almost the same garments in the 88 countries, The items are sold at nearly 6,000 stores all over the world. This means that costumers can find same garments in different real shops in various countries’ (Gonzalez-Rodriguez, 2015). Doyle (2012) says ‘in the age of online
Coolcargo and Frito-Lay implemented technical solutions for agricultural-products transportation following customers’ requirements. Coolcargo developed a transport-system for maintain fresh asparagus at controlled temperature from production site in Thailand to final destination in UK (UOL, 2013). Frito-Lay developed a global agile supply-chain for manufacturing and distributing salty-snacks to end-customers that allows processing agricultural-products in less than 24 hours for flavor guarantee (PepsiCo, 2013).