Zara, the largest retailer within the Inditex portfolio, has been able to maintain a competitive advantage over its competitors by offering up-to-the-minute fashions in its stores throughout Europe, Asia, the Middle East and the Americas. Zara is the result of a clothing factory integrating forward to take advantage of linkages between manufacturing and retailing. These linkages are facilitated by information technology and Zara has developed a highly automated production and distribution system to service its stores. The information systems within Zara stores are easy to use and stable, but much discussion is taking place regarding whether or not to upgrade them to take advantage of new technologies which could better support the company’s business strategy.
Strengths & Opportunities
1. Strategy: Speed & Style
Zara’s strategy is to deliver up-to-the-minute fashions to its customers who are looking for the latest trends. In order to achieve this goal, all of Zara’s operations are developed around the tenants of speed and decentralized decision-making. All of Zara’s divisions work to decrease the time it takes to bring products from the design table to the sales floor to ensure customers find what they are looking for. By delivering new styles to stores quickly Zara is able to respond rapidly to changes in clothing trends and in the market. This allows the company to spend very little on advertising and still maximize revenue by constantly introducing new styles. This rapid merchandise turnover encourages customers to visit stores frequently as they know there will be new items available and to purchase items they like immediately since they know the offerings will be different the next time they visit...
... middle of paper ...
...ot utilize the benefits of the current systems and incorporate additional features that would improve Zara’s operations.
Zara’s strategic and successful use of information technology in its production and distribution system was acknowledged in 2006 when the company received the Wharton Infosys Business Transformation Award which honors excellence and innovation in information technology. Inditex received the Enterprise Transformation Award for, “redefin[ing] the business model for the fashion industry by reducing the time taken to get merchandise from the design to in-store phase.” Zara also has expanded its range of merchandise to include house wares like bed and bath linens, tableware, rugs, and other home accessories which are available for purchase throughout Europe from its website, www.zarahome.com, and are shipped directly to customers.
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- Zara is a retailing chain of Inditexthat specializes in high-fashion at reasonable prices. In the last 12 months, Inditex’s stock price has increased by 50% despite bearish market conditions. The 50% increase is due to the investor expectations of Inditex’s growth. Inditex’s growth can be contributed to the decisions it has made in creating a vertically integrated centralized process. The centralization of its vertically integrated operations in Europe provided it with its competitive advantage; however, I believe it will also make it fail if it decides to grow substantially into other markets.... [tags: Business Analysis Case Study]
1524 words (4.4 pages)
- Teague Homework 9 MBA 672 11/10/15 1a: Zara’s ability to manage some of the manufacturing in-house and distribute only what is absolutely necessary to outside manufacturers gives them a unique amount of flexibility and control over cost and quality. Their competitors are primarily outsourcing the production, so that control over price is lost. 1b: The stores are able to receive inventory quickly and more than once per week, which allows them to keep their inventory “fresher”. The stores also don’t keep any inventory beyond what is on the shelves, in most cases, so they run the risk of running out of some styles that prove to be more popular than others.... [tags: Management, Manufacturing, Outsourcing]
961 words (2.7 pages)
- Problem Statement: In 2003, Zara's CIO must decide whether to upgrade the retailer's IT infrastructure and capabilities. At the time of the case, the company relies on an out-of-date operating system for its store terminals and has no full-time network in place across stores. Despite these limitations, however, Zara's parent company, Inditex, has built an extraordinarily well-performing value chain that is by far the most responsive in the industry. Therefore the major problem to the company is to decide whether it has to upgrade the present system and by doing so, risking the reliability they have with the current system or to continue with the present DOS based system which will not be com... [tags: Problem, Solution, Case Study]
863 words (2.5 pages)
- Zara is a fashion company that runs internationally and does so being a part of five other apparel retailing chains. Inditex (Industria de Diseno Textil) of Spain is the owner of the chains with Zara being the most successful of the chains. Inditex’s founder and owner is Amancio Ortega, a man who is Spain’s richest man despite starting off as an errand boy. Inditex came out on fire with their Initial Public Offering in May of 2001. They enjoyed an increase of nearly 50% of its stock price in the next 12 months.... [tags: spain, apparel retailing chains, sucess]
1590 words (4.5 pages)
- In the case, Marks & Spencer and Zara, it discusses two business process designs that each company took. You first had Marks & Spencer, who had a more traditional approach. Their chain started of with the buying team, design, developers, merchandisers, technologist, suppliers, logistics, and lastly the store. Zara, however, comes up with a new innovative design. With this new design in effect the delivery of new collections only has a lead-time of 5 days. They were able to cut down this time due to the fact that products where mainly produced on Galicia.... [tags: Marketing, Supply chain management, Supply chain]
1077 words (3.1 pages)
- ... Accordingly, traffic is created through mall location while store traffic is managed through merchandize presentation. Promotion is hence acquired through spread by mouth. Theories of Globalization of Zara Knowledge sharing Knowledge sharing and management are what makes Zara effective. This makes the communication line between the retailer and consumer to be effective to the company. This connects well with the knowledge flow model as it is bound to lead to successful globalization. Additionally, it makes it possible for the exchange of information with foreign centers, back to the local units and then back to foreign markets (Jonsson, 2008).... [tags: theories of globalization, production]
1482 words (4.2 pages)
- The following paper analyzes the supply chain strategies conducted by Zara, European based retail store, with the aid of “Zara Clothing Company Supply Chain,” a recent article that analyses Zara’s success through its supply chain. Further, it highlights the strengths and key practices that allow Zara to be able to have such a successful supply chain in regards to efficiency and responsiveness. “Zara Clothing Company Supply Chain” (2016) is a study conducted by SCM Globe, an online supply chain design and simulation tool.... [tags: Supply chain management, Supply chain]
928 words (2.7 pages)
- Fast fashion Fast fashion is merely more than a one hit wonder. The fast fashion industry has grown and has ultimately proven itself to be profitable industry in the clothing market. The retailer most distinguished for a fast fashion approach is Zara (Hayes & Jones, 2006). Zara is a child company of the parent company Inditex. Zara stores have established the stride for merchants around the globe in creating and shipping fashionable clothing (“Case 3-4. Continued Growth for Zara and Inditex”, 2013).... [tags: marketing strategy, marketing mix, diversity]
1533 words (4.4 pages)
- ZARA Fashion 1) With which of the international competitors listed in the case is it most interesting to compare Inditexâ€™s financial results. Why. What do comparisons indicate about Inditexâ€™s relative operating economics. Its relative capital efficiency. Note that while the electronic version of Exhibit 6 automates some of the comparisons, you will probably want to dig further into them. The four companies shown above have very different business models. Inditex owned much of the production and most of its stores.... [tags: essays research papers]
2436 words (7 pages)
- Porter Analysis of the Zara Fashion Chain The Zara fashion chain, with 546 stores in 30 countries today ?from which 340 are outside Spain- and ?2914,3 millions of total sales in 2002, is undoubtedly the group?s locomotive (Inditex, 2003). In 2002 it represented 33% of the group?s total stores, accounted for 72% of the group?s total sales and contributed to the holding?s total profits for ?540.4 millions (Inditex FY2002 Results Presentation, 2003). Moreover, Zara with 75-90 new stores within 2003 takes the lion?s share in group?s current year store openings (total openings for 2003: 260-315).... [tags: Business Analysis Retail Essays]
443 words (1.3 pages)