Zara Case Study

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Zara’s history of success and failures The focus of thesis will be on Zara, the clothing company, which differentiates itself in many areas. Zara is part of the group Inditex, which is the world’s first largest clothing retailer. The group improved its position on the market thanks to its incredible business model, based on innovation and differentiation. To its innovative approach towards the business development, the Spanish group succeeded in a very fast international expansion. It is now present in 88 countries, with 6,683 stores and 137,054 employees around the world, including 2000 Zara stores ( Zara was established by Amancio Ortega Gaona. He opened his first shop in 1975, in La Coruna, Spain. The first idea of the…show more content…
The main reason for this is that Zara does not forecast the designer clothing. Fabrics and garments are the only materials to be purchased on the basis of forecasts. Their main strength is to capture real-time information on the shop floor and develop designs on the basis of this information: so-called ‘commercial managers’ conceptualize the type of garments and the kind of fabric it will be made off. Based on this real-time information, garments and its technical specifications are prepared in strong collaboration with other department along the supply chain. In doing so, the final design is ‘assembled’ on the basis of current customer demand. This gives Zara a strong competitive advantage since they integrated the product development with up-to date marketing activities and…show more content…
Vertical integration means that all the stages of the value chain are controlled by the Group, a distinctive feature of ZARA’s business model, has allowed the company to successfully develop a strong merchandising strategy. This strategy has led ZARA to create a climate of scarcity and opportunity as well as a fast-fashion system. Zara manufactures 60% of its own products. By owning its in-house production, Zara is able to be flexible in the variety, amount and frequency of the new styles they produce. Also, 85% of this production is done through the season, which allows the chain to constantly provide its costumer with new products. Table 1. Zara’s target market is very broad because they do not define their target by segmenting ages and lifestyles as traditional retailers do. Its target market is a young, educated one that likes fashion and is sensitive to fashion. The international strategy of this fashion chain is excellent because it adopted a balanced mixture of standardization and customization. As a result of evaluation, it can be summarized that Zara: • Has various

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