Case study: ZARA

Thèmes abordés

Zara, case study, vertical integration, supply chain, SWOT analysis, corporate social responsibility, work equity, brand awareness

Résumé du document

One of the main traits of ZARA's business model is its vertical integration.
This strategic decision to limit the outsourcing and integrate every stage of the supply chain process, from the design to the sell in their own managed stores, helps ZARA to cut costs and optimize performance.

Extraits

[...] It's hard to always remain on top of the competition but by emotionally engaging their customers ZARA may guarantee their loyalty even in times of crises and stiff competition. The lack of corporate social responsibility and non-respect of work equity promise big problems for ZARA if not solved. This is bad advertising but moreover may result in clashes with local, international reglamentation and fines. Conclusion Nowadays we are more and more aware of the limited resources and the damages for the environment. In that sense it's dangerous for ZARA to run a one way supply chain without taking into account the social and environmental consequences. [...]

[...] The often use ambassadors and they relay on worth of mouth to attract and retain new costumers. We would like to point out that there is a lack of external but very strong internal communication. The concept of bringing high fashion products to the mass market as fast as possible is the key of ZARA's success. Although the prices of the products are accessible ZARA manage to maintain high standard image. In order to maintain its success ZARA will need to adapt with new trends in technology. They can use disruptive technology in stores and online. [...]

[...] - Products don't stay in wear house more than 72 hours and garments hit floors shop within three weeks of design B. Outsourcing ZARA outsource 14% of its production in Turkey, Romania and Bulgaria and 35% in Asian countries such as China, Thailand, India and Bangladesh. Which allows them to reduce the cost of production. In 2007 in order to answer the critics ZARA publically committed to respect work equity and engage with suppliers who are doing the same. However ZARA focus on short deliveries pushes them to contract suppliers who are not always able to respect work equity standards. [...]

[...] Case study: ZARA I. What is Zara's philosophy A. Vertical integration One of the main traits of ZARA's business model is its vertical integration. This strategic decision to limit the outsourcing and integrate every stage of the supply chain process, from the design to the sell in their own managed stores, helps ZARA to cut costs and optimize performance. B. Agile supply chain This model gives the company the ability to be flexible and quickly adapt to customer desires and new trends, but also to shorten the time needed for the product production, distribution and sale. [...]