ASSIGNME

NT
Case
study of any one
international retailer

Submitted
by

MANU MATHEW
3rd yr
BSC in FT

ZARA

ZARA is a Spanish clothing and accessories retailer based

in Arteixo, Galicia. Founded in 24 May, 1975 by Amancio
Ortega and Rosala Mera. Zara needs just two weeks to
develop a new product and get it to stores, compared to
the six-month industry average, and launches around
11,000 new designs each year

VISION
ZARA is committed to satisfying the desires of our
customers. As a result we pledge to continuously
innovate our business to improve your experience. We
promise to provide new designs made from quality
materials that are affordable
Mission Statement
Through Zaras business model, we aim to contribute to
the sustainable development of society and that of the
environment with which we interacts.
BRAND POSITIONING
Zara among others, has about 3,000 stores worldwide
H&M, based in Swede n, has 2,500 (when you include its
smaller lines of stores); and Mango, based in Spain,

2,400.Zara accounts for nearly 70% of Inditexs income,

and, therefore, ma kes it the pillar of Amancio Ortegas
the 3rd richest man.
Zara controls and coordinates perfectly all the process
and allows reducing the times to minimums. Zara
provided a considerable number of products, which were
more than rival corporations in the fashion industry. It
produced approximately 11,000 different products per
year, while its major rivals only produce 2,000 to 4,000.
Zara spent four to five weeks on the process of designing
a new product and getting finished products in its stores.
So, Zara already was the leading brand in `fast fashion.
Zara could redesign existing products in no more than
two weeks. Zara is indeed a unique brand that, instead of
creating an exclusive brand. Now that major fast fashion
competitors are adopting Zaras model, Inditex will be
-necessarily- bringing to the fashion retail industry.

1Question 1 :
What advantage does Zara gain against the
competition by having a very responsive supply
chain?
Answer 1 :
They sells most of it products on half markdowns in
its store.
Short lead time for new variety increases there
market.
Increase in number of there retail store.
Increase their flexibility in providing new styles to
coustmer.

Question 2 :
Why has Inditex chosen to have both inhouse manufacturing and outsourced
manufacturing? Why has Inditex maintained
manufacturing capacity in Europe even
though
manufacturing in Asia is much cheaper?

Answer 2 :
To fullfill there uncertain and predictible demands.
To launch their new styles according to there targets
( 5 to 6 week).
To setting their trends quickly to compete with there
competitors in market.
To control their demand.
They choose europe because there max number of
stores are in europe and there they also have a quick
and flexible sources which helps them to lauch their
designs quickly.
Question 3 :
Why does Zara source products with uncertain
demand from local manufacturers and products
with predictable demand from Asian
manufacturers?
Answer 3 :
There main target is to launch new design after every 5
to 6 week to attract the coustmer so at that point cost
doesnt matter that much so they utilize there local
manufacturers because they are quick and flexible so
thats why they source uncertain demand from them.
And outsource the predictable demand from asia at low
cost.

Question 4 :
What advantage does Zara gain from
replenishing its stores multiple times a week
compared to a less frequent schedule? How does
the frequency of replenishment affect the design
of its distribution system?
Answer 4 :
It allow them to match supply closely to the coustmer
demand other than there competitors. In this manner
there distribution system keep them up to date to
derived the coustmer interest towards them.
Question 5 :
Do you think Zaras responsive replenishment
infrastructure is better suited for online sales or
retail sales?
Answer 5 :
Responsive replenishment is better suited for the retail
stores because in online sales there is a time to deliver
the product to the coustmer so in this time we can
manage our product to parcel the coustmer. But in
retail store we have to display the products.

CONCLUSION
1.Zara has an unordinary supply chain, which gives
them a highly
competitive advantage.
2. Zara has successfully introduced a new, unique
business model
into the apparel manufacturing and retail industry.

3. Zara choose to handle design, production, and

distribution in-house and concentrate the whole
production close to their headquarters in Spain.
4. By entire process, Zara can react much faster than
its competitors do to both the ephemeral trends in
the world of fashion and the capricious tastes of its
customers.
5. Zara have achieved their success by thinking out of
the box.
6. Their success is directly related to their ability to
understand their customer most innate needs and
desires and tie these to successful innovation
strategies, which ultimately lead to these new and
unique approaches to their business.