ZARA case analysis

Document Type:Case Study

Subject Area:Business

Document 1

ZARA is a registered associate of INDITEX group. The company has set up its retail outlets globally, America, Asia Pacific, Hon Kong, and the Middle East. It’s five thousand plus outlets from the INDITEX group share 8 ZARA stores globally. The company provides the current and latest in global fashion in a setting of involving the thought-out design. The company’s outlets situated in the main commercial parts of urban in the U. It supplies every of it products itself. Most of the observers place the company’s achievement to the management of the activities from manufacturing works to the selling points. Thus, it takes about 3 weeks getting from scratchpad plan to the garments hook in the outlets. Actually, it is not ambiguous to view the company as average in 9 months since they offer modern outfits themselves, these outfits comprises those one where one takes the major risk when outsourcing it to the market, this is because these clothes are designed and made by ZARA itself, thus the design and color may be simply nipped to what the consumer needs.

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Zara sells mainly three lines of products, for children, men and women. Zara also created value in their primary activity of manufacturing through their usage of the just-in-time inventory system. This system allowed Zara to be extremely efficient in which their stores are able to have exactly what consumers’ want when needed. This also allowed for Zara to produce the latest fashions the fastest. In manufacturing Zara also created value by consenting enormous production to be internally carried out, it allowed the company to provide and manage exceptional quality for fashionable products. Besides their manufacturing processes, Zara also created value towards the end of the value chain in their marketing and sales. Regular analysis of inventories is the parameter of determining optimal price at which products should be sold.

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Zara invests in inventory management that guide in reducing losses and achieving higher gross margins. Zara relies on customer feedback guides on what to stock in responding to deficit issues. Competent designers and product managers are tasked to administer design, sourcing and production. This team is mandated to collect and respond to customer feedback. Each of these lines has its autonomous creative team who usually conducts fashion proposals and suggestions for each campaign. The company has been successful in the apparel industry due to mainly flexibility and agility. This allows the company to quickly pick up on various new fashion trends, forecast stock requirement accurately to reduce markdowns, and to effectively respond to the external factors such as weather. That the company is flexible and agile comes down to its business model.

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